Economics

When Bank Stocks Surge Hurts Investors

by admin304 comments
Big banks’ health is Europe’s big financial concern once again.

Many European banking institutions failed to cope when oil prices plummet seriously. So the stock exchange markets in EU do not tend to grow. There is a growing discontent among those banks investors. Many of them fear the worst – banks mass defaults of obligations.

The price to insure Deutsche Bank’s (DB) debts has increased almost twice over the past few months. Now it reached the highest level since the 2011 turmoil of sovereign debts, according to FactSet. Swiss bank Credit Suisse (CS) is also heavily criticized. The insurance cost of its debt jumped twice as well.

Fears for European banks adds up to global world economy slumps. And sparked rumors

post18_cmp

People still remember the Great Recession of 2008, it looms over investors. It doesn’t take a lot to spook everyone into being afraid that we’re going to have another global financial downturn.Will Smith

Thats Ed Yardmen’s point if view. He’s a president of investment consulting group Yardeni Research. Of course, today’s shortages of banks is not even close to the Great Recession crisis at this moment. And big banks in the America and EU grew much stronger since that turndown. Still, banks are causing some kind of panics this year. Shares of Bank of America (BAC) are down 27% this year while Goldman Sachs (GS) is 18% in the red. By comparison, the Dow is down “only” by 8%. European banks are doing even worse. Euro STOXX bank index lost around 30%, effectively downing to three-year lows. Deutsche Bank has dropped almost half its stock value over the past few months. “Now each bank in Europe and elsewhere is having its investment returns viability placed under big question mark…”. Michael Block, chief market strategist at Rhino Trading, told in a client note. So why do banks globally are having such are a hard time now?

New recession and oil prices effect

First, banks investing groups are on alarm. It is connected with the increased risk of new, bigger global recession. They are afraid that banks, and specifically big European ones  heavily depend on risky trading revenue.  Done instead of more stable and predictable deposits, they could suffer themselves a collapse.

Rumors that Deutsche Bank can be not affording itself to pay off interest rates for some debts due in April were a game changer. It forced Germany’s biggest bank to come out to worrisome investors twice in the course of 24 hours. John Cryan, the bank’s co-CEO, claims Deutsche Bank is “absolutely rock solid.” The other big crisis factor is the drop in commodities price — especially oil. Energy companies took a huge debt burden when oil was being sold at $100 a barrel. Now that it’s at $28, these loan defaults are on the rise and many small and mid-sized oil companies have already filed for bankruptcy.

So, all investors are worried big banks have done nada to brace for the coming uprise of oil defaults. Especially now, as oil tends to stay below $40 threshold for a long time. Will shale loans turn into the 2016 version of subprime for real estate and CDOs, synthetic CDOs? Government bankers are also making investors freaky. For example, U.S. bank stocks came up last year. It happened on a  wave of hopes the Federal Reserve would noticeably up the rates in 2016. Higher rates would have given banks more room to make money. Namely, on the difference between the interest they pay out on deposits and what they are taking on loans and credits.

But the 2016 market disaster has made chances the Fed raises rates much this year almost impossible. Frankly, worldwide central bankers are actively going the other way. The EU Central Bank prints new banknotes daily. It has and has even implied at more stimulus to come. And the Bank of Japan shocked the markets by introducing negative interest rates.

post5_cmp

“The scaring potential for a lengthy zero interest rate environment is spooky. made investors speak up against European banking shares,”. Relte Stephen Schutte, an analyst at research firm Markit, wrote in a note. Though, big banks are way healthier than in 2008. But some believe the financial “curing” has not been complete. Some think the “disease” of “not-to-big-to-fail” lingers on. “But still there’s very few systematic “errors” in the system now. Fewer than even in 2011, let alone 2007/2008,” Bespoke Investment Group wrote in a note.

Bespoke group also highlighted that big bank balance sheets are “dramatically” less leveraged.  Also they made it vocal that lenders have been forced to hold back a lot of capital to avoid future losses. Nevertheless, Bespoke said big banks can handle even the worst-case scenario. They could suffer a write-down of all their energy loans by using just twenty-five percent of their revenues. “I don’t think there is any economical crisis risks here. Bank capitalization in the United States and Europe is awfully good. It’s hard to be worried about it,”.  Said David Kelly, chief global strategist at JPMorgan Funds.

admin

Written by

The editorial board of our magazine constitutes of diverse analysts. Ranging from financial journalists, researchers, and people with operating experience on the markets and stock exchanges.

304 Responses

  4. … [Trackback]

    […] Find More Information here to that Topic: mccg.us/2016/02/25/when-bank-stocks-surge-hurts-investors/ […]

    reply

  5. … [Trackback]

    […] Read More here on that Topic: mccg.us/2016/02/25/when-bank-stocks-surge-hurts-investors/ […]

    reply

  6. … [Trackback]

    […] Read More on on that Topic: mccg.us/2016/02/25/when-bank-stocks-surge-hurts-investors/ […]

    reply

  8. … [Trackback]

    […] Find More Information here to that Topic: mccg.us/2016/02/25/when-bank-stocks-surge-hurts-investors/ […]

    reply

  13. … [Trackback]

    […] Find More Information here on that Topic: mccg.us/2016/02/25/when-bank-stocks-surge-hurts-investors/ […]

    reply

  15. … [Trackback]

    […] Find More Information here to that Topic: mccg.us/2016/02/25/when-bank-stocks-surge-hurts-investors/ […]

    reply

  22. Good post! We will be linking to this particularly great post on our site. Keep up the great writing

    reply

  50. Quando você esquecer a senha para bloquear a tela, se você não inserir a senha correta, será difícil desbloquear e obter acesso. Se você achar que seu namorado / namorada suspeita, você pode ter pensado em hackear o telefone Samsung dele para obter mais evidências. Aqui, iremos fornecer-lhe a melhor solução para descobrir a palavra-passe do telemóvel Samsung.

    reply

  61. Hello my loved one I want to say that this post is amazing great written and include almost all significant infos I would like to look extra posts like this

    reply

  136. Its like you read my mind! You appear to know a lot about this, like you wrote the book in it or something. I think that you could do with some pics to drive the message home a little bit, but instead of that, this is fantastic blog. An excellent read. I will certainly be back.

    reply

  183. Great info and right to the point. I don’t know if this is
    actually the best place to ask but do you folks have any thoughts on where to hire some professional writers?
    Thx 🙂 Escape room lista

    reply

  198. The very next time I read a blog, I hope that it won’t disappoint me as much as this particular one. After all, I know it was my choice to read, however I actually believed you would have something useful to talk about. All I hear is a bunch of crying about something you could fix if you weren’t too busy looking for attention.

    reply

  199. This website really has all the information I needed concerning this subject and didn’t know who to ask.

    reply

  200. Oh my goodness! Impressive article dude! Thank you, However I am encountering problems with your RSS. I don’t know why I can’t join it. Is there anybody having identical RSS issues? Anybody who knows the answer can you kindly respond? Thanks!

    reply

  201. Nice post. I learn something new and challenging on blogs I stumbleupon every day. It’s always interesting to read through articles from other authors and use a little something from other web sites.

    reply

  204. This website was… how do you say it? Relevant!! Finally I have found something which helped me. Many thanks.

    reply

  205. This is a topic that is close to my heart… Many thanks! Where are your contact details though?

    reply

  208. I must thank you for the efforts you have put in writing this website. I really hope to view the same high-grade blog posts from you in the future as well. In truth, your creative writing abilities has inspired me to get my own, personal blog now 😉

    reply

  210. This website was… how do you say it? Relevant!! Finally I have found something that helped me. Appreciate it.

    reply

  211. May I just say what a comfort to uncover someone who genuinely knows what they are discussing on the net. You certainly understand how to bring a problem to light and make it important. A lot more people need to look at this and understand this side of the story. I was surprised you aren’t more popular since you surely have the gift.

    reply

  215. Hi, I do think your blog could be having web browser compatibility issues. When I look at your web site in Safari, it looks fine however, if opening in Internet Explorer, it has some overlapping issues. I just wanted to provide you with a quick heads up! Apart from that, wonderful blog!

    reply

  216. I’m extremely pleased to find this great site. I want to to thank you for ones time due to this wonderful read!! I definitely appreciated every bit of it and i also have you saved as a favorite to see new information in your site.

    reply

  217. Howdy! This blog post couldn’t be written any better! Going through this article reminds me of my previous roommate! He continually kept preaching about this. I’ll send this article to him. Pretty sure he will have a very good read. Thanks for sharing!

    reply

  218. I was very happy to find this web site. I wanted to thank you for your time for this particularly wonderful read!! I definitely really liked every bit of it and I have you bookmarked to see new information on your site.

    reply

  220. Pretty! This was an extremely wonderful post. Thank you for supplying these details.

    reply

  221. Oh my goodness! Impressive article dude! Thanks, However I am having troubles with your RSS. I don’t understand why I am unable to join it. Is there anybody getting identical RSS issues? Anyone who knows the solution will you kindly respond? Thanx!!

    reply

  223. Hi, I do think this is an excellent website. I stumbledupon it 😉 I’m going to return yet again since i have book marked it. Money and freedom is the greatest way to change, may you be rich and continue to guide other people.

    reply

  224. Spot on with this write-up, I really feel this amazing site needs a lot more attention. I’ll probably be returning to read through more, thanks for the advice.

    reply

  226. Your style is so unique compared to other folks I have read stuff from. Thanks for posting when you’ve got the opportunity, Guess I’ll just book mark this blog.

    reply

  227. When I originally left a comment I appear to have clicked the -Notify me when new comments are added- checkbox and now whenever a comment is added I recieve four emails with the same comment. Is there a means you are able to remove me from that service? Thanks a lot.

    reply

  228. Greetings, I believe your blog could be having browser compatibility issues. Whenever I take a look at your site in Safari, it looks fine however when opening in Internet Explorer, it has some overlapping issues. I simply wanted to provide you with a quick heads up! Other than that, fantastic blog!

    reply

  230. I’d like to thank you for the efforts you have put in penning this site. I am hoping to see the same high-grade blog posts from you later on as well. In fact, your creative writing abilities has inspired me to get my own blog now 😉

    reply

  233. Your style is so unique in comparison to other people I have read stuff from. Thanks for posting when you’ve got the opportunity, Guess I’ll just bookmark this web site.

    reply

  235. Having read this I thought it was very enlightening. I appreciate you spending some time and effort to put this content together. I once again find myself spending way too much time both reading and leaving comments. But so what, it was still worth it.

    reply

  237. You’re so cool! I do not suppose I have read something like that before. So nice to find another person with some unique thoughts on this issue. Seriously.. thanks for starting this up. This site is one thing that’s needed on the internet, someone with a bit of originality.

    reply

  238. Spot on with this write-up, I truly believe that this website needs a lot more attention. I’ll probably be returning to read more, thanks for the information.

    reply

  240. This is the right site for everyone who wishes to understand this topic. You know so much its almost hard to argue with you (not that I really will need to…HaHa). You certainly put a fresh spin on a subject which has been discussed for decades. Great stuff, just great.

    reply

  242. Good article! We will be linking to this great article on our website. Keep up the good writing.

    reply

  243. When I initially left a comment I seem to have clicked on the -Notify me when new comments are added- checkbox and from now on each time a comment is added I recieve four emails with the exact same comment. Perhaps there is a means you can remove me from that service? Appreciate it.

    reply

  244. Oh my goodness! Impressive article dude! Many thanks, However I am going through problems with your RSS. I don’t understand the reason why I am unable to join it. Is there anybody else having identical RSS issues? Anyone that knows the answer can you kindly respond? Thanx!

    reply

  245. Right here is the perfect web site for anyone who would like to understand this topic. You know a whole lot its almost tough to argue with you (not that I really would want to…HaHa). You certainly put a fresh spin on a topic that has been discussed for years. Wonderful stuff, just great.

    reply

  248. This is a topic which is near to my heart… Cheers! Where can I find the contact details for questions?

    reply

  256. Nice post. I learn something new and challenging on blogs I stumbleupon on a daily basis. It will always be useful to read articles from other authors and use something from their websites.

    reply

  259. Good post. I learn something totally new and challenging on blogs I stumbleupon every day. It will always be helpful to read content from other authors and use a little something from other sites.

    reply

  260. Hello there, I do think your website could be having internet browser compatibility issues. Whenever I look at your web site in Safari, it looks fine however, if opening in IE, it has some overlapping issues. I merely wanted to provide you with a quick heads up! Besides that, wonderful website!

    reply

  261. Howdy! I could have sworn I’ve visited this web site before but after browsing through many of the articles I realized it’s new to me. Anyhow, I’m certainly delighted I found it and I’ll be bookmarking it and checking back frequently.

    reply

  263. Good day! I could have sworn I’ve visited this site before but after going through some of the articles I realized it’s new to me. Anyhow, I’m certainly happy I discovered it and I’ll be bookmarking it and checking back regularly!

    reply

  268. ในฐานะแพลตฟอร์มการพนันที่มีประสบการณ์ยาวนานหลายปี fun88 มุ่งมั่นที่จะมอบประสบการณ์การพนันออนไลน์ที่ปลอดภัย ยุติธรรม และน่าตื่นเต้นแก่ผู้เล่น.fun88 มือถือ

    reply

  269. Nice post. I learn something new and challenging on blogs I stumbleupon every day. It will always be useful to read through content from other writers and use something from other websites.

    reply

  270. Real Estate I’m often to blogging and i really appreciate your content. The article has actually peaks my interest. I’m going to bookmark your web site and maintain checking for brand spanking new information.

    reply

  276. Hey, Jack here. I’m hooked on your website’s content – it’s informative, engaging, and always up-to-date. Thanks for setting the bar high!

    reply

  277. An outstanding share! I’ve just forwarded this onto a co-worker who has been conducting a little research on this. And he actually ordered me breakfast because I found it for him… lol. So let me reword this…. Thank YOU for the meal!! But yeah, thanks for spending time to talk about this subject here on your blog.

    reply

  278. An interesting discussion is worth comment. I think that you need to publish more about this subject matter, it might not be a taboo subject but typically people do not discuss these issues. To the next! Kind regards.

    reply

  279. I’m impressed, I have to admit. Seldom do I encounter a blog that’s equally educative and interesting, and let me tell you, you’ve hit the nail on the head. The issue is something that too few men and women are speaking intelligently about. I am very happy that I stumbled across this in my search for something concerning this.

    reply

  283. Hey there! I’m Charles, your guide to generating income in your sleep– well, almost. Invite to the 1K a Day System, where we turn your digital dreams into cold hard money. Are you prepared to stop scrolling and begin earning? Let’s ditch those cent strategies and get ready for some severe bank. Join us, and let’s hit those $1K days together!

    reply

  284. Hello, it’s Charles here, pertaining to you from the land of endless opportunity– or as we like to call it, the 1K a Day System. Here, we teach you how to make more than a well-fed squirrel collects nuts for the winter season. If you’re all set to accumulate those digital acorns, hop on board! Let’s make your bank account as plump as those cheeky animals by signing up today.

    reply

  286. Hi there! Just wanted to pop by and express my admiration for your blog. Your knowledge in making money from home is truly remarkable. Making money from home is a ambition for many, and affiliate promotion provides a viable path to achieve it. It’s all about leveraging your online presence and promoting items or services that resonate with your audience. Your blog is a treasure trove of information for up-and-coming online entrepreneurs. Keep up the fantastic work!

    reply

  287. Hey there! Just wanted saying hello to let you know how truly I admire your blog. Your insights on affiliate marketing are truly noteworthy. Making money from home has never been more attainable thanks to affiliate marketing. It’s all about finding the ideal goods to promote and nurturing connections with your audience. Your blog is a treasure trove of insights for up-and-coming affiliate marketers. Keep up the great work!

    reply

  288. Hello there, I do think your site could be having internet browser compatibility problems. Whenever I take a look at your blog in Safari, it looks fine however, if opening in I.E., it’s got some overlapping issues. I simply wanted to provide you with a quick heads up! Besides that, great blog!

    reply

  289. Can you be j88 more specific about the content of your article? After reading it, I still have some doubts. Hope you can help me.

    reply

  290. Hi there! Just felt like saying hello to praise your awesome blog. Your expertise on making money online are really inspiring. Making money from home has never been more accessible with affiliate promotion. It’s all about leveraging your online presence and marketing products or services that resonate with your audience. Your blog is a treasured resource for anyone interested in making money from home. Keep up the excellent work!

    reply

  292. iramatogel
    Your style is unique compared to other folks I have read stuff from.

    I appreciate you for posting when you have the opportunity, Guess I will just bookmark this web site.

    reply

  295. savefrom tiktok
    Someone essentially assist to make seriously articles I might state.
    That is the very first time I frequented your web page and thus
    far? I surprised with the analysis you made to make this particular submit extraordinary.
    Magnificent job!

    reply

  296. I’m impressed, I have to admit. Seldom do I come across a blog that’s both equally educative and entertaining, and without a doubt, you’ve hit the nail on the head. The problem is something that too few people are speaking intelligently about. I am very happy I stumbled across this in my hunt for something concerning this.

    reply

  297. An impressive share! I’ve just forwarded this onto a friend who was doing a little homework on this. And he in fact bought me lunch due to the fact that I discovered it for him… lol. So let me reword this…. Thank YOU for the meal!! But yeah, thanks for spending time to talk about this topic here on your website.

    reply

  298. An impressive share! I’ve just forwarded this onto a friend who has been doing a little research on this. And he actually bought me breakfast because I stumbled upon it for him… lol. So let me reword this…. Thank YOU for the meal!! But yeah, thanx for spending the time to talk about this matter here on your website.

    reply

  300. When I initially commented I appear to have clicked the -Notify me when new comments are added- checkbox and now each time a comment is added I get four emails with the exact same comment. Perhaps there is a way you are able to remove me from that service? Thanks a lot.

    reply

  303. The next time I read a blog, I hope that it doesn’t fail me just as much as this particular one. After all, I know it was my choice to read, however I truly thought you would have something interesting to say. All I hear is a bunch of moaning about something that you could possibly fix if you weren’t too busy searching for attention.

    reply

Leave a Reply

Your email address will not be published.